Terahertz time-domain spectroscopy (THz-TDS) technology is a new developing technology in recent years, which can get electric field intensity and phase information at the same time. Consequently via Fourier transform of the input pulse and the propagated pulse, the optics, electrics and dielectric characteristics of the sample changing with terahertz frequency can be precisely characterized. The methods to generate the terahertz wave by photoconductive antennas, optical rectification and air plasmas are described and how to detect the terahertz wave by photoconductive antennas, electro-optic sampling and air plasmas are introduced. The principle, composition and characteristics of THz-TDS system are also described. Furthermore, the applications of the THz-TDS in various research fields are discussed. Finally, the development of this technology is forecasted.